The Conference Board Consumer Confidence Index® declined sharply in March, following an increase in February. The Index now stands at 120.0 (1985=100), down from 132.6 in February. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased from 169.3 to 167.7. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined from 108.1 last month to 88.2 this month.
“Consumer confidence declined sharply in March due to a deterioration in the short-term outlook,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation Index remained relatively strong, reflective of an economy that was on solid footing, and prior to the recent surge in unemployment claims. However, the intensification of COVID-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs. March’s decline in confidence is more in line with a severe contraction – rather than a temporary shock – and further declines are sure to follow.”
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was March 19.
Consumers’ assessment of current conditions was less favorable in March. The percentage of consumers claiming business conditions are “good” was relatively unchanged at 39.6 percent, while those claiming business conditions are “bad” increased, from 10.8 percent to 11.4 percent. Consumers’ assessment of the job market also moderated from last month. Those saying jobs are “plentiful” decreased from 46.5 percent to 44.9 percent, while those claiming jobs are “hard to get” was unchanged at 13.9 percent.
Consumers were significantly less optimistic about the short-term outlook. The percentage of consumers expecting business conditions will improve over the next six months decreased from 20.6 percent to 18.2 percent, while those expecting business conditions will worsen increased from 7.2 percent to 14.9 percent.
Consumers’ outlook for the labor market was also less positive. The proportion expecting more jobs declined from 16.6 percent to 15.5 percent, while those anticipating fewer jobs in the months ahead increased, from 12.0 percent to 17.1 percent. Regarding their short-term income prospects, the percentage of consumers expecting an increase declined from 22.7 percent to 20.7 percent, while the proportion expecting a decrease rose from 6.1 percent to 8.8 percent.